Register  |  Login  |  Inquiries  |  Sitemap
Advanced Search
Journal of Economic Integration 2006 September;21(3) :458-473.
DOI: https://doi.org/10.11130/jei.2006.21.3.458
Output Correlation and EMU: Evidence from European Countries
Kazuyuki Inagaki 
Graduate School of Economics, Kobe University
Copyright ©2006 Journal of Economic Integration
ABSTRACT

This paper examines the endogenous nature of business cycle synchronization. Using the residual cross-correlation approach, we explore output correlation between European EMU member countries. Our findings can be summarized as follows: (i) contemporaneous correlation estimates become more significant during the EMU period; (ii) business cycles are dependent but not highly synchronized during the pre-EMU period; (iii) after the transition to EMU, business cycles are dependent and more highly synchronized. These empirical results suggest that costs arising from asymmetric business cycles have a tendency to decrease. On these grounds, we conclude that the endogeneity of OCA hypothesis holds in the case of the euro area.

JEL Classifications: E32, F15

Keywords: EMU | Endogeneity of OCA | Output correlation
Editorial Office
Center for Economic Integration, Sejong Institution, Sejong University, 209, Neungdong-Ro, Gwangjin-Gu,
Seoul, 05006, Korea
TEL : +82-2-3408-3338    FAX : +82-2-3408-3338   E-mail : jei@sejong.ac.kr
Browse Articles |  Current Issue |  For Authors and Reviewers |  About
Copyright© by Center for Economic Integration. All right reserved.